Chancellor Rachel Reeves’ Spring Statement on 26 March 2025 showed commitment to achieving a budget surplus and reducing net financial debt, but many issues raised in the Autumn Budget 2024 which are vital to the livelihoods and financial stability of people across the UK remain unaddressed. We consider below the impact on non-UK domiciled individuals (“non-doms“), entrepreneurs, farmers and property owners.
Non-doms
This Spring Statement did not impose any new tax burdens on people across the UK, but it did little to improve the current situation for many – and will certainly do nothing to stop the growing flow of non-doms looking to move out of the UK. The relocation trend began in March last year with the announcement of major reforms to the non-dom tax regime from 6 April 2025, and has caused many affected individuals to reassess the UK as their long-term home. The Spring Statement included the claim that the new residence-based regime for “non-doms” will be more attractive to new arrivals than the current rules and, whilst time will tell on this, the success of the new regime should be equally measured by the effect it has on those “non-dom” individuals who have decided to leave the UK as a result of the changes over the last 12 months since the abolition of the non dom regime was originally announced; this, coupled with the fact that many new arrivers who are attracted to the new regime are only likely to stay for four years under the new system, will serve to create a more transient economic picture and is unlikely to fill the economic void left by non doms who have since left the UK.
For many internationally mobile non-dom individuals, the real concern is not about the impact today, but about what it means long-term for their business and family, such as opportunities for financial growth and the ability to pass on a legacy. For these individuals, many of who pay significant amount of tax in the UK and contribute in many ways to the diversity and wealth of the UK economy, it is essential we see stability in our tax system and tax policies more orientated to the long-term, as opposed to those that may raise money in the short term but will drive away those that will contribute to the UK economy in future years.
Agricultural, rural and landed estates
No changes were today announced to the £1 million cap which was proposed in the Autumn Budget 2024 in respect of inheritance tax Business Property Relief and Agricultural Property Relief. While farmers and rural landowners can breathe a sigh of relief that the news on taxation did not get any worse, many will regret that the government has yet to grant any concessions to reflect the significant impact these changes will have on them. Despite this, there was a promise of a drive to increase housebuilding, which will likely be welcome news to housebuilders and land owners alike.
Earlier this month, DEFRA pulled up the drawbridge on the Sustainable Farming Incentive, leaving many farmers and landowners not only wondering how many acres they would have to sell to pay the next slug of inheritance tax, but whether, now, their income was going to exceed their costs of sales at all. This is, after all, an industry that on average collects three ten thousandths of the supermarket price of a loaf of bread, for the wheat out of which the bread is made.
Rachel Reeves has spoken frequently of the government’s desire to encourage growth in the UK: many landowners, farmers and rural property owners are keen to diversify, develop and invest in their land, from rewilding to housing development or creating jobs through investment in hospitality and retail. The much-mooted average saving of £300,000 per estate from Agricultural Property Relief is exactly the type of capital that could be invested into these projects.
For the various rural lobby-groups, getting the government conversant with the pressures that now bear on thousands of non-urban businesses that feed us has been, and remains a significant undertaking. There is little to be seen in this statement that evinces any such conversance.
Property taxes
If you have any questions or concerns about the Spring Statement, please contact your usual Wedlake Bell adviser.
This article is for general information only and does not seek to give legal advice or to be an exhaustive statement of the law. Specific advice should always be sought for individual cases.